Mexico’s Femsa posts third-quarter profit dip on peso strength, discontinued ops

MEXICO CITY (Reuters) – Mexican bottler and retailer Femsa posted a 9% year-on-year dip in its third-quarter net profit on Friday, weighed down by the strength of the Mexican peso and a decrease in income from discontinued operations.

Femsa, which controls one of the world’s largest Coca-Cola (NYSE:) bottlers and a sprawling empire of Oxxo corner shops, saw its net income come down to 9.74 billion pesos ($558.87 million) from 10.75 billion pesos.

Femsa said its profits were boosted by higher operations, an exchange-rate bump and a decrease in net interest expenses.

However, they were offset by the appreciation of the Mexican peso compared to the dollar and a drop in income from discontinued operations, which included Femsa’s previous stake in Heineken (AS:).

The peso has appreciated 14% from the September 2022-September 2023 period.

Femsa is looking to redouble its efforts on its core business, selling off stakes in Heineken and Jetro Restaurant Depot.

It added last quarter that it could spend $7 billion to $8 billion in store openings over the next five to six years.

Same-store sales in FEMSA’s Oxxo stores across Latin America grew 15%, boosted by demand for snacks, beer and other drinks, while the firm also added 293 stores over the quarter.

The company’s fintech arm, Spin by Oxxo, saw growth of 1.2 million new users in the quarter, taking its total user base to 8.8 million, more than double the number of users in the year-ago quarter. Total monthly transactions were up 15.6%.

Quarterly revenue rose 19% to 188.1 billion pesos ($10.79 billion) in the July-to-September period, propelled by across-the-board growth, but missing the LSEG consensus of 199.7 billion pesos. Femsa’s earnings before interest, tax, depreciation and amortization (EBITDA), or core earnings, for the quarter rose 15% to 25.37 billion pesos.

The company added that the regulatory processes required to set up a joint supply platform for cleaning products, food disposable and packaging with Bradyifs in the United States. Femsa had said it in August it would hold 37% stake.

($1 = 17.4279 Mexican pesos at end-September)